Hartford Business Journal

18 Hartford Business Journal • June 26, 2017 www.HartfordBusiness.com Although the sale closed in 2013, the suit claims that it wasn't until the homeowner, Kristen Cole, hired an engineer in early 2016 that the scope of the dwelling's foundation problems became apparent, said Brian Dan- forth, who is Cole's attorney. Heavy rainfall last December seeped into her basement. Cole filed suit last year against Coldwell Banker Real Estate LLC, several of its subsid- iaries, realty broker Julie Corrado as well as the former homeowners, who have all denied having knowledge of the faulty foundation at the time of the sale, court records show. Coldwell Bank Residential Services, in an emailed statement, said: "We operate with integrity and strive to uphold the highest of ethical standards. We are defending our- selves in this matter. We will not comment further on pending litigation." A Coldwell spokeswoman said in the email that its agents are not employees, rather they are independent contractors. Corrado also declined comment, citing the pending suit. Danforth says he represents between 200 and 250 property owners with foundation problems, but so far he has filed only one suit against a realty broker. The state Department of Consumer Protection counts 583 broken- foundation complaints in Connecticut. "This house is bad,'' he said of Cole's dwell- ing at 30 Andreis Trail. "It's one of the worst ones I've seen. … It's a tough situation. But there are a few people who aren't convinced that brokers didn't know about these problems.'' The South Wind- sor foundation case, which could be headed to a jury trial in early 2018, is likely one of the first of potentially many civil lawsuits against brokers and others involved in the sale of houses with defec- tive foundations in South Windsor, Tolland, Ellington, Vernon, Manchester and other northeast Connecticut towns, observers say. Other industries also have been targets of legal action related to crumbling founda- tions, whose cause has been linked to the mineral pyr- rhotite found in the concrete supplied by J. J. Mottes & Co., according to a state consumer protection investigative report. Last year, for example, several homeowners joined a class-action law- suit against dozens of insurance companies they claim are part of a "concerted scheme to deny them cover- age for their failing basement walls, which experts say must be replaced." The case is ongoing, court records show. Raising awareness In an industry where people-to-people interaction is vital to arranging and closing a deal, realty agents and brokers are particu- larly sensitive about anything that casts a negative spotlight on their business model. "Real estate agents are not con- crete experts,'' said Ellington Realtor Dan Keune. "Any- body that claims that he is, is lying." That sensitiv- ity also is the reason Connecticut's agent/ Realtor community has moved pre-emptively to open what it says "is better communica- tion'' between property owners looking to sell and prospective buyers. The Connecticut Association of Realtors (CAR), the state's largest agent-broker lobby, within the past month has introduced what it considers a more comprehensive disclosure statement related to property foundations. The Greater Hartford Association of Real- tors referred foundation-disclosure inquiries to its umbrella affiliate, CAR, which declined comment on the suit against Coldwell Banker. The disclosure form aims to alert buy- ers and sellers as to whether any foundation problems are known to exist, or have been remediated. It is, Realtors say, not meant to shield them from potential liability for failing to discover or disclose foundation problems, but to raise awareness. "We spend a lot of time talking about foun- dations,'' said Keune, principal in Campbell- Keune Realty Inc. and a member of CAR's property condition subcommittee that revised its home-foundation advisory disclosure. "We didn't spend this much time 10 years ago.'' Brenda Draghi, an attorney-partner with Danforth, said that in Nov. 2015, CAR issued an "advisory,'' alerting homebuyers to the cracked- foundation problem. In late May, the lobby issued a revised advisory document for Realtors to present to homebuyers and sellers. The previous advi- sory's language, said Keune, was "too open to interpretation'' and did not always lead to full disclosure of information vital to buyers. The new one, he said, is more direct: "Does the seller have any knowledge of any testing or repairs related to a foundation on the property?" "It really does pretty much remove the Realtors from any responsibility of knowl- edge'' about whether a home has a foundation problem, Draghi said. Another advisory-form change focuses on condominium sellers. Often, a condo owner is asked about his/her unit and the building, Keune said, but it may be surrounded by other buildings for which the seller lacks any knowl- edge about the condition of their foundations. Property disclosures will continue to evolve, Keune said. n Realtor Foundation Disclosure Form The Connecticut Association of Realtors, the state's largest agent- broker lobby, has introduced what it considers a more comprehen- sive disclosure statement related to property foundations. The disclosure aims to alert buyers and sellers as to whether any foundation problems are known to exist, or have been remediated. It is, Realtors say, not meant to shield them from potential liabil- ity for failing to discover or disclose foundation problems, but to raise awareness. Below is a snapshot of part of a disclosure form. Realtors respond with revised advisory form from page 1 H B J P H O T O | B I L L M O R G A N South Windsor resident Kristen Cole is dealing with cracks in her home's foundation. ▶ ▶ ' Real estate agents are not concrete experts. Anybody that claims that he is, is lying.' Ellington Realtor Dan Keune. ©2015‐2016 Connecticut Association of REALTORS®, Inc. Publication Date 11/18/15; Last Revised 6/16/16 FOUNDATION ADVISORY for BUYERS Foundation cracks, problems or failures may be a result of many factors including but not limited to chemical compositions in foundation materials or natural occurrences at any time during the life of a property. Recent reports of issues with concrete foundations in some residential homes and condominium complexes in Connecticut prompted the State of Connecticut's Department of Consumer Protection (DCP) to develop information for consumers and to conduct an investigation to identify the extent and scope of the issue, as that is not fully identified. Structural engineers can provide guidance and expert assistance into aspects of foundation problems and concerns. The DCP information for consumers on concrete foundations may be viewed online and printed from the DCP website, http://www.ct.gov/dcp/cwp/view.asp?a=1625&Q=569328. That official information continues to be updated by DCP as new information becomes available, and includes the latest update on the state investigation into the cause of the crumbling foundations, a brochure with pictures of visible foundation cracks, how to verify the Professional Engineer license of a structural engineer, insurance information, and other information they have determined is important for consumers to know about and related to concrete foundations. Consumers are strongly encouraged to check regularly for the latest updates at the DCP page noted herein. State law requires all Sellers to disclose any material facts about the property. Material facts include whether a property has ever had foundation problems or cracks and any known repairs made to the foundation during the life of the property. By signing below, Buyer acknowledges receipt of this Advisory. Buyer further acknowledges and agrees real estate licensees are not experts in foundations and foundation materials and cannot undertake any independent investigations into the condition of foundations or representations that may be made by Sellers, home inspectors or others on any property. ____________________________ ____________________________ Buyer Name Printed Buyer Name Printed ____________________________ ____________________________ Buyer Signature Buyer Signature ______________ ______________ Date Date ©2015‐2016 Connecticut Association of REALTORS®, Inc. Publication Date 11/18/15; Last Revised 6/16/16 FOUNDATION ADVISORY for BUYERS Foundation cracks, problems or failures may be a result of many factors including but not limited to chemical compositions in foundation materials or natural occurrences at any time during the life of a property. Recent reports of issues with concrete foundations in some residential homes and condominium complexes in Connecticut prompted the State of Connecticut's Department of Consumer Protection (DCP) to develop information for consumers and to conduct an investigation to identify the extent and scope of the issue, as that is not fully identified. Structural engineers can provide guidance and expert assistance into aspects of foundation problems and concerns. The DCP information for consumers on concrete foundations may be viewed online and printed from the DCP website, http://www.ct.gov/dcp/cwp/view.asp?a=1625&Q=569328. That official information continues to be updated by DCP as new information becomes available, and includes the latest update on the state investigation into the cause of the crumbling foundations, a brochure with pictures of visible foundation cracks, how to verify the Professional Engineer license of a structural engineer, insurance information, and other information they have determined is important for consumers to know about and related to concrete foundations. Consumers are strongly encouraged to check regularly for the latest updates at the DCP page noted herein. State law requires all Sellers to disclose any material facts about the property. Material facts include whether a property has ever had foundation problems or cracks and any known repairs made to the foundation during the life of the property. By signing below, Buyer acknowledges receipt of this Advisory. Buyer further acknowledges and agrees real estate licensees are not experts in foundations and foundation materials and cannot undertake any independent investigations into the condition of foundations or representations that may be made by Sellers, home inspectors or others on any property. ____________________________ ____________________________ Buyer Name Printed Buyer Name Printed ____________________________ ____________________________ Buyer Signature Buyer Signature ______________ ______________ Date Date

• Cover